By Katia Dmitrieva and Bloomberg
February 1, 2019

The government shutdown couldn’t restrain the labor market’s strength at the start of 2019, though it did complicate the picture.

The five-week shutdown that ended Jan. 25 helped push up the unemployment rate, which the Labor Department compiles from the survey of households. Furloughed federal workers and affected contractors were typically counted as unemployed on temporary layoff during the period.

The number of unemployed who reported they were temporarily laid off jumped 23 percent to 937,000, while those working part time for economic reasons, also known as involuntary part-timers, rose about 500,000 to 5.1 million, an increase that was almost entirely in the private sector, the Labor Department said Friday. That suggests government contractors temporarily had their hours reduced or were forced to seek part-time work.

Those factors helped raise the main jobless rate to a seven-month high of 4 percent and push up the broad U-6 measure of underemployment to 8.1 percent from 7.6 percent.

Meanwhile, the shutdown that affected a quarter of government agencies had no “discernible impacts” on the separate establishment survey for business and government employment, hours, and earnings, Labor said. That survey counted furloughed federal workers as employed because they will receive back pay, leaving the payrolls tally unscathed.

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